2005 (10) TMI 329 - AT - Central Excise

Refund - Interest for delayed payment - Order - Illegality of - Demand - Amount withheld by department

Summary

Issues:
1. Claim for interest on delayed refund
2. Legal provisions regarding interest on delayed refunds
3. Chronology of events leading to the refund claim

Analysis:
1. Claim for interest on delayed refund:
The appeal was filed against the rejection of the claim for interest of Rs. 8,71,165/- by the Commissioner of Customs & Central Excise (Appeals). The appellants sought interest at 18% from 8-6-1987 till 10-6-2002. The Advocate argued that the amount was due in June 1987 but was paid in 2002 due to the Department's actions. The appellants contended that the delayed payment warranted interest, emphasizing the settlement of the original refund claim in 1987.

2. Legal provisions regarding interest on delayed refunds:
The Tribunal examined the legal framework concerning interest on delayed refunds. Section 11BB of the Central Excise Act deals with interest on delayed refunds, enacted on 26-5-1995. The Tribunal noted that prior to this provision, there was no framework for interest on delayed refunds. The Tribunal highlighted that the refund in question was granted within three months, eliminating the eligibility for interest. The Tribunal acknowledged the procedural delays in refund processes but emphasized adherence to the law.

3. Chronology of events leading to the refund claim:
The Tribunal reviewed the sequence of events leading to the refund claim. The appellants faced challenges with withheld amounts, procedural disputes, and subsequent refund processes spanning over several years. The Tribunal recognized the efforts of the appellants in pursuing the case diligently. However, considering the legal interpretations and actions taken by the excise authorities at various stages, the Tribunal concluded that there was no provision to grant interest from 1987. Despite sympathizing with the appellants' situation, the Tribunal upheld the rejection of the appeal and the Order-in-Appeal.

In conclusion, the Tribunal, while acknowledging the complexities and delays in refund processes, based its decision on the legal provisions and the specific circumstances of the case. The appeal for interest on the delayed refund was rejected, emphasizing adherence to the law and the absence of provisions for interest in the given scenario.